MWS is a gold and uranium tailings retreatment operation run by First Uranium 8km from Klerksdorp in South Africa. Franco-Nevada inherited the MWS asset through its acquisition of Gold Wheaton in March 2011. In December 2008 Gold Wheaton acquired the right to purchase 25% of the gold produced from the MWS project for an upfront payment of US$125M and for ongoing payments equal to the lesser of (a) $400 per ounce of payable gold (subject to an annual 1% inflation adjustment, starting in the fourth year after closing), and (b) the then prevailing market price per ounce of gold. The operator is required to make penalty payments to Franco-Nevada totalling $36M if certain completion test criteria are not met by December 1, 2011.

The Project comprises retreatment of material from fourteen tailings dams, twelve of which originated from the processing of material from the Buffelsfontein, Hartebeestfontein and Stilfontein Gold Mines. The processing facility is planned to be comprised of three operating units. Two units are currently operating and the third is scheduled to be commissioned in 2011. In a technical report dated January 1, 2010 First Uranium provided a mine plan anticipating the go-forward production from its 2012 fiscal year of 1.83Moz of gold over a 15 year mine life with average annual gold production of 122,000 oz. The projections indicate gold production for First Uranium’s 2012 fiscal year of 128,360 ounces.

Updated: March 24, 2011